Simple Interest
Math MCQs

Question :    Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.

Correct Answer  6

Solution & Explanation

Solution

Given,

Principal (P) = $5500

Rate of Simple Interest (R) = 6% per annum

Amount (A) = $7480

Thus, time (T) = ?

Method (1) Using Formula

Calculation of Simple Interest, when Principal and Amount are given

Formual to Calculate Simple Interest when Principal and Amount are given

We know that, Amount (A) = Principal (P) + Simple Interest (SI)

⇒ Simple Interest (SI) = Amount – Principal

⇒ SI = $7480 – $5500 = $1980

Thus, Simple Interest = $1980

Calculation of the Time using forumula when Amount, Simple Interest and Principal are known

Formula to find the Time (T)

Time (T) = ^{100 × Simple Interest}/_{Principal × Rate of Interest}

⇒ T = ^{100 × SI}/_{P × R}

Thus, Time (T) = ^{100 × 1980}/_{5500 × 6}

= ¹⁹⁸⁰⁰⁰/₃₃₀₀₀

= 6 years (using formula)

Thus, Time (T) = 6 years (from time taken before calculation)Answer

Calculation of the Time using Unitary Method when Amount, Simple Interest and Principal are known

Here, we have

Principal (P) = $5500

Rate of Simple Interest (R) = 6% per annum

Simple Interest = $1980 (As calculated above by subtracting Principal from the Amount given)

We know that, interest is calculated on the basis of the Principal.

This means Simple Interest for 1 year = Rate of simple interest × Principal

Thus, Simple Interest for 1 year = 6% of Principal

= 6% of $5500

= ⁶/₁₀₀ × 5500

= ^{6 × 5500}/₁₀₀

= ³³⁰⁰⁰/₁₀₀ = 330

Thus, simple Interest for 1 year = $330

Now,

∵ If the simple Interest is $330, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₃₀ years

∴ If the simple Interest is $1980, then the time = ¹/₃₃₀ × 1980 years

= ^{1 × 1980}/₃₃₀ years

= ¹⁹⁸⁰/₃₃₀ = 6 years

Thus, time (T) = 6 years Answer

Similar Questions

(1) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 6% simple interest?

(2) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 6% simple interest for 8 years.

(3) If Susan paid $4380 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(4) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 2% simple interest.

(5) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.

(6) Calculate the amount due if Susan borrowed a sum of $3650 at 10% simple interest for 3 years.

(7) If Michael paid $3960 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(8) Find the amount to be paid if David borrowed a sum of $5400 at 8% simple interest for 7 years.

(9) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 5% simple interest?

(10) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 5% simple interest.